When building, selling, or buying a home, you’ll likely hear about a “certificate of occupancy.” But what does it actually mean? In this post, we’ll walk you through the basics around a certificate of occupancy is, when you’ll need one, how to get one, and why it’s necessary.
What Is a Certificate of Occupancy?
So, what is a certificate of occupancy anyway? A certificate of occupancy, also called an occupancy permit, a building occupancy permit, or an occupation permit depending on where you live, is simply an official document to prove that the building in question is safe and suitable for use.
More specifically, a certificate of occupancy is your official document stating:
A. What the Building is Going to Be Used For:
The certificate of occupancy describes what “class” the property is in, such as a residential building (which includes single-family and multi-unit properties), a retail property, a commercial building, a mixed-use property, etc.
This classification is just to keep the property from being used in an intended way that violates the municipalities zoning for the area; for example, using a residential property as a restaurant.
B. The Structure Is Fit for Occupancy:
An occupancy certificate also serves as proof that a property has complied with all building standards and codes and is safe enough for people to use as intended.
C. The Structure Complies With All Building Codes:
Finally, a certificate of occupancy proves the building has conformed to all housing and building codes. This is especially helpful for landlords if a tenant tries to complain about violations at the property.
This is also why the document is often required to close a mortgage loan on a property.
It’s important to note that a certificate of occupancy is not a building permit or a construction permit, which is a document that approves the scope of work for a home renovation or addition.
Who Needs a Certificate of Occupancy?
There are different scenarios where you may need to obtain a certificate of occupancy for a residential property, and it can differ by city or town, so it’s always best to check with your municipality. Here’s a list of the most common instances where you’ll need one:
1. You’re Building a New Construction Home
New construction has of course never been used or lived in before. As such, a certificate of occupancy is always needed to ensure a new home or building is fit to live in and meets all building codes for safety.
2. You’re Buying an Existing Home
Sellers don’t always need a certificate of occupancy to sell a home, but buyers generally need one to move forward with the mortgage process. Even so, in a home sale transaction, it’s usually the seller’s responsibility to pay for and obtain the certificate of occupancy (though sometimes buyers and sellers split that cost).
3. You’re Making a Change of Ownership
This is more for commercial-type properties, but when a multi-unit residential property changes ownership, it usually requires a new certificate of occupancy to be issued.
4. You’re Changing the Way a Property is Used
As a property owner, your needs might change. When a property is changing from one use to another, a certificate of occupancy will almost always be required. For example, if a warehouse is being converted to residential lofts.
5. You’re Renovating or Adding On to a Property
Many municipalities will require you to get a certificate of occupancy for any construction that changes the occupancy type of the property or that changes the way in which you exit the property.
In some cases, you may also need a certificate of occupancy when you’re renovating a home or building, such as finishing a basement or constructing an addition.
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Where Do You Get a Certificate of Occupancy?
To get an occupancy certificate, you’ll need to fill out an application with your municipality or city’s local zoning or building department and pay a fee.
If this is a new-construction home you’ll need to request the certificate before any work is actually done but it won’t be issued until the property has passed all inspection requirements and/or any property fines have been paid.
What Are the Inspection Requirements for A Certificate of Occupancy?
If your home is a new build, your property will need to pass a series of inspections to get its certificate of occupancy. These usually include:
- A fire inspection;
- An electrical inspection;
- A plumbing inspection; and
- A general building inspection.
Often these inspections are done in parts, for example, you might first need a rough-in electrical inspection when the wires are inserted into the wall and the panel is attached, followed by a final electrical inspection once the walls are closed and the fixtures are up.
If you’re seeking a certificate of occupancy for a home that’s already built and you’re selling it, you likely just need a single inspection or evaluation.
Each municipality or city has its own laws around certificates of occupancy and the inspection process in one area might vary from another so don’t hesitate to contact them to find out exactly what’s needed and when; it’s part of their job to keep you informed.
What Happens if You Don’t Pass One or More Inspections?
If your home is a new build and something doesn’t pass an inspection, you’ll usually be given a list of items that need to be corrected, and a certain amount of time to correct them.
Once you have completed the repairs, you can call to have your property re-inspected, though you may have to pay an additional fee. Once everything is stamped with final approvals, you should be granted your certificate of occupancy.
If your home is an older home and the certificate is needed for re-sale, you might fail to obtain a certificate of occupancy if certain things are outdated and therefore not up to code.
Safety codes can change over time. While your home may have been up to code when it was built, that doesn’t mean it’s up to code now. Often, people who try to sell older homes run into issues with aluminum wiring and outlets and piping issues.
If this is your situation, you’ll need to hire professionals to make whatever changes your inspector calls for — such as “pigtailing” your outlets for aluminum wiring — to get that certificate of occupancy.
Conclusion
A certificate of occupancy is something you can’t really get around.
If it turns out your local government requires you to get a certificate of occupancy for the type of property you have or for the work you are doing and you don’t you could be fined or even sued by the municipality.
Luckily, the municipality wants you to have a safe and usable property so they will help you out along the way; don’t be afraid to ask them for assistance.
thewriteDuffy
At home, April is a mom, wife, and DIY darling. Among other home projects, she helped her husband Dan renovate their 1986 bungalow and is currently designing and decorating the 2023 custom home they are building themselves. Professionally, April is a writer, author, and online marketer with 15 years of experience writing for newspapers and magazines, building online authority websites, and publishing books.
With any project, 80 percent of the work is done in the planning stage. We have simple checklists to help you get organized and make sure you’re prepared for every step along the way. Download them now for FREE: